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Voice of the Broadcasting Industry Volume 22, Issue 11

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Voice of the Broadcasting Industry Volume 22, Issue 11 November 2005 Voice of the Broadcasting Industry Volume 22, Issue 11 $8.00 USA $12.50 Canada-Foreign RADIORADIO NEWS ® NEWS and TV subsidiary. Lincoln hadn’t been in broadcasting, but Chairman How should HD Radio and CEO Jon Boscia likes what he sees and says the company will keep the broadcast unit—with a name change expected. be numbered? Jefferson-Pilot Communications currently provides about 10% of the Lots of people in radio are excited about opportunities for multicasting operating profits at Jefferson-Pilot Corporation. That will translate to with HD Radio and a handful of stations are already offering a second about 4% of the operating profits at the merged company. HD program channel in addition to the HD channel duplicating their RBR observation: The value of the Jeff-Pilot Communications sub- analog programming. Of course, there aren’t very many HD receivers sidiary wasn’t broken out from the main deal. However, Jeff-Pilot sup- out in the marketplace yet—and even fewer second-generation receiv- plies considerable financial data about the broadcast operation, although ers capable of tuning to the second channel. For now, those second it doesn’t separate radio and TV, so we can come up with a ballpark channels are being called HD-2, but there’s a debate going on inside the figure. The broadcast division had $239 million in revenues in 2004, radio industry about how HD should be numbered going forward. about 6% of the company’s total of 4.1 billion. Jeff-Pilot Communica- Cox Radio kicked off the debate by asking other radio groups for tions reported broadcast cash flow of $108 million for 2004. If we apply input on focus group research it plans to fund to ask consumers for a blended 12 times multiple, the value of the broadcast stations in this their opinion on various channel numbering schemes. Cox manage- deal is roughly 1.3 billion. After looking at BIA figures, out best guess is ment prefers an approach which would continue the current FM band that radio accounts for about 63% of revenues and cash flow, so we’re numbering system, so the first additional channel for a station on 88.1 calling this deal $820 million for radio and $480 million for TV. would be designated 108.1. With eight HD channels per licensee (once analog signals are phased out), the Cox numbering system would run from 88.1 through 247.9. Zinio users can see the entire chart. When will the We at RBR would prefer to see radio get away from “point-any- thing” and move to a new channel numbering system that’s more indecency shoe drop? consumer friendly. Our proposal would number AM HD stations from Despite the fact that the FCC email boxes have been relatively channel 530 through 1709 and FM HD from 2000 through 3009. quiet all year when it comes to indecency complaints, we’ve been Zinio users can also see that entire chart here. hearing all summer that the Commission was close to clearing out RBR observation: We’re not sure our proposal is perfect, but we a large backlog of indecency cases already being processed. FCC do think it’s a step in the right direction. HD is a great opportunity for officials at the September NAB Radio Show in Philadelphia con- radio to rebrand itself, so it’s important to get it right. We’re all going firmed this and said cases were almost ready to be made public. to live with this for many decades to come. The best suggestion we’ve As we write this, nearly a month has gone by and still: nothing. heard so far is that the radio industry needs to band together and hire One thing is certain, however. This is one issue where it doesn’t branding experts to research the HD Radio numbering question. More matter that this is a Commission frequently polarized on party creative thinking is needed, along with some professional research, to lines and hamstrung by an empty seat which promises a two-two make sure radio gets this right. tie vote on many contentious issues. When it comes to indecency, each party has a hawk: Chairman Kevin Martin from the Repub- Jefferson-Pilot sold licans and Michael Copps from the Democrats. And it’s not like Republican Kathleen Abernathy and Democrat Jonathan to Lincoln Financial Adelstein are pro-indecency either. While everyone in radio and TV was focused on the auctions of the One option looking ahead is to further refine content control Emmis TV group and Susquehanna Radio, an unexpected deal flew in devices and better educate parents on how to effectively use them, under everyone’s radar—not that media companies had any opportu- but that only works for video services. Radio broadcasters have nity to bid anyway. In a move to become a much bigger player in the long complained that they have had to bear the brunt of FCC insurance business, Lincoln Financial announced a deal to acquire indecency enforcement while TV largely gets off the hook. If TV Jefferson-Pilot Corporation for $7.5 billion in cash and stock. That, of gets time to pursue its tech options, look for the emphasis on course, includes Jefferson-Pilot Communications, the company’s radio punitive enforcement to continue with its heavy radio tilt. American Media Services, LLC The Move In Experts Charleston, SC • Chicago, IL • Austin, TX • Dallas, TX 888-697-6630 American Media Services loves a challenge. With a client list containing solid name recognition, senior staff expertise, complete discretion, and key relationships...AMS is the full service firm. We have earned a reputation for making it happen. www.americanmediaservices.com RBRi&iTVBRZNovemberi2005 3 TELEVISION NEWSTV NEWS life. Lot’s of possibilities and I’ll take time to consider all options,” Apple unveils Video iPod he told RBR/TVBR. No immediate replacement was named and The radio industry is already seeing the impact of Apple’s iPod Tribune Company CEO Dennis FitzSimons told analysts that devices. The hugely popular and extremely portable devices for Tribune Broadcasting Vice Presidents John Reardon and John playing music is making it harder than ever for radio stations to Vitanovec are now reporting directly to him. attract listeners in the younger demos. Now it’s TV’s turn. At Fisher Communications, Colleen Brown has been Just in time for the Christmas shopping season, Apple has un- named President and CEO, nine months after the ouster of veiled an iPod capable of playing videos, evolving the ubiquitous William Krippaehne. She once headed the TV group at music player into a multimedia platform for everything from TV Lee Enterprises and most recently was Sr. VP at Belo, over- shows to music videos. Videos will now be sold alongside songs seeing its TV and cable operations in Texas. Before the job on Apple’s iTunes Music Store—including ABC-TV and Disney at Lee, she managed Gannett’s TV station in Phoenix. With Channel shows. That has some ABC affiliates worrying about her arrival, acting President and CEO Ben Tucker exited to whether the move will devalue their local franchises, but Disney “pursue other interests.” CEO Bob Iger is gung-ho on keeping up with new technologies. TVBR observation: Who was it who first said “There are 200 In announcing the new video iPod, Apple CEO Steve Jobs said management jobs in broadcasting and 250 people playing musi- the companies will start with five shows, including ABC’s “Des- cal chairs”? We hear that both Tucker and Mullen are working on perate Housewives” and “Lost,” as well as the new ABC drama business plans to return to broadcasting in an ownership role. “Night Stalker” and the two most popular shows on Disney Chan- nel, “That’s So Raven” and “The Suite Life of Zack & Cody.” Cur- rent season episodes of the ABC series will be available for down- DTV-Day on the calendar load from Apple’s iTunes Music Store the day after they are broad- By the time you read this, it is as close to a sure thing as there is cast, while the entire first season of “Desperate Housewives” and “Lost” will be available for download immediately. in Washington that there will be a hard date for broadcast televi- TVBR observation: The key is to go where the consumers are. sion stations to bring to a close the current side-by-side analog/ Radio companies are still trying to figure out audio iPod plays, digital operating regimen and go digital only. It is widely be- with some offering downloads of popular Talk shows and others lieved that 4/7/09 will be the big day. providing music downloads to make young listeners get accus- The especially active hurricane season served to up the vol- tomed to visiting their websites—and hopefully listen to the radio ume of calls to move the date forward, notably from John station as well. But consumers also want portable video. TV com- McCain (R-AZ), but these calls have met resistance from McCain’s panies are now doing deals with telecom companies to supply successor at the helm of the Senate Commerce Committee, Ted short video pieces for video cell phones. Video iPods is yet an- Stevens (R-AK). other logical step. Disney is the first to jump into the pool—but it The fuel propelling the earlier-date movement is the provision won’t be the last. of spectrum to emergency first-responders. A big goal on that front is to gain interoperability between numerous communica- tions systems in use that currently cannot communicate with one Musical chairs in another.
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